Seagate and Western Digital, with stocks each up 200%+ in 2025, will join Nasdaq 100 before the December 22 market open; GlobalFoundries will leave the index
Six firms are set to join the Nasdaq 100 Index as part of its annual reconstitution, the benchmark's overseer said Friday.
Context & Ripple Effects
Seagate and Western Digital had already been identified as standout beneficiaries of AI-related demand for hard drives, with both shares sharply outperforming the broader market in 2025. Their index entry formalizes that market repricing within a major technology benchmark.
The change follows the Nasdaq 100's recurring practice of reshuffling membership, including last year's additions of MicroStrategy, Palantir and Axon. It also contrasts with GlobalFoundries' removal, separating storage suppliers' recent momentum from a semiconductor foundry's position in the benchmark.
First-order effects
- Nasdaq-100 tracking funds and managers that benchmark against the index must rebalance into Seagate and Western Digital and out of GlobalFoundries ahead of the effective date.
- Seagate and Western Digital gain benchmark membership and the associated visibility to index-oriented investors; GlobalFoundries loses that direct index exposure.
Second-order effects
- The reconstitution can concentrate near-term trading and price sensitivity around the three stocks as passive and benchmark-aware investors complete required portfolio changes.
- The additions reinforce storage hardware as a recognized AI-infrastructure beneficiary, putting greater investor focus on whether other suppliers can show similarly durable demand exposure.
Third-order effects
- If storage suppliers retain benchmark representation after their rally, AI-market leadership may continue broadening from compute chips into the surrounding hardware stack rather than remaining confined to a small set of platform companies.
- Index reconstitutions increasingly transmit thematic equity leadership into passive portfolios, making benchmark rules and constituent turnover more consequential for capital allocation.
The trend: AI infrastructure demand is widening market leadership from headline compute vendors to the storage and hardware suppliers that support data-intensive workloads.